Finance blogger and ETF manager Eddy Elfenbein has outperformed investment heavyweights Warren Buffett’s Berkshire Hathaway and Cathie Wood’s ARK Invest since 2018 with a distinctive approach of filling his exchange-traded fund (ETF) with what he calls ‘boring’ stocks.
Elfenbein’s strategy involves creating a 25-name “buy list” at the beginning of each year for his AdvisorShares Focused Equity ETF, ticker CWS, and then refraining from making any adjustments for the next 12 months. This disciplined approach has yielded remarkable results, achieving a 110% return since 2018, compared to 74% for Berkshire Hathaway and 45% for ARK Invest’s Innovation Fund.
In a recent podcast interview with Downtown Josh Brown, Elfenbein, known for his Crossing Wall Street blog, shared insights into his investing philosophy. He emphasized the efficacy of a ‘set and forget’ mentality, stating that investors can achieve success without frequent trading or chasing well-known growth stocks. The key, according to Elfenbein, is maintaining a disciplined and patient approach with a seemingly ‘boring’ portfolio.
Elfenbein began publishing his “buy list” in 2006 and launched the ETF in 2016 in response to reader requests to invest with him. The ETF follows an equal-weighted structure, with each stock constituting approximately 4% of the fund. While Elfenbein allows for up to five stock swaps at the start of each year, the fund generally experiences minimal trading or shuffling.
The current “buy list” includes familiar names such as Hershey, Intuit, Moody’s, HEICO, and packaging manufacturer Silgan. Notably, many stocks, including Aflac, have been long-standing components of the fund. Elfenbein emphasizes the importance of asking whether he’d be comfortable holding a stock for an average of five years when making investment decisions.
With the fund nearing $100 million in assets under management, Elfenbein’s approach has resonated with investors seeking a straightforward and patient investment strategy. The average holding period for the ETF is five years, contributing to an 18-year compound gain of 573%, surpassing the S&P 500’s 447% return over the same period.
In Elfenbein’s own words, the goal is to be “as lazy as possible,” focusing on a strategy that prioritizes long-term stability and consistent returns.
